In China, concerns grow over environmental costs of Apple products

From the ground, Kaedar’s factory looms over Tongxin village. The village is lined with garbage. People here sift through it, looking for recyclable material. Everyone who could afford to move has moved, say local villagers. - Rob Schmitz/Marketplace

Kai Ryssdal: One place I haven't been able to find a bargain online today has been the Apple website. iPads and iPhones -- full-price only, thanks.

Most of Apple's bestselling stuff is made overseas. China, mainly. But if you go looking for the Apple logo on a factory over there, that's just not going to happen. The company's as secretive about its suppliers as it is about everything else. In fact, that's the root of all its secrecy. But it's been getting harder for Apple to keep everything it does under wraps. There are real and growing concerns about environmental problems at Chinese factories thought to be working with Apple.

Marketplace's Rob Schmitz reports.

Rob Schmitz: The story begins with a factory just outside of Shanghai. It's three football fields long; it's blue and gray; and it's owned by the Taiwanese company Kaedar Electronics. In August, environmental groups released a report saying Kaedar's factory was emitting toxic levels of pollution. The report also said the company was making products for Apple -- which is notorious for keeping its supply chain secret. The report said the pollution was so bad that it was making people in a nearby village sick. So, I went there.

The streets of Tongxin village are lined with garbage. The air carries a strong chemical smell -- like WD-40. When I arrived, people were eager to tell me about the pollution.

Bao Shuiping: The fumes make my family dizzy. It's hard to walk outside sometimes because of the smell.

A 15-foot wall is the only thing separating Kaedar's factory from Bao Shuiping's front door. Tongxin didn't used to be like this. For decades, it was a quiet farming village with a creek meandering through it. Then, 10 years ago, one factory after another was built, until the village was completely surrounded.

Neither Kaedar nor Apple would talk about the factory. Behind the scenes, though, Apple met with environmentalists like Ma Jun, one of the authors of the pollution report and one of China's best-known activists. Apple's supply chain managers told Ma the company audited nearly a dozen of its suppliers. They showed him a power point presentation of their findings: improper wastewater treatment, bad hazardous storage practices, things like that. But...

Ma Jun: They used one slide to explain this.

One slide -- that's it -- and Apple wouldn't identify which suppliers were polluting.

Ma: If they don't want to let the public know who their suppliers are, they should at least encourage or require the suppliers with violation records to come up and disclose their own problems to the public by themselves.

Ma says he understands the need to keep suppliers in China secret, especially given the country's notorious reputation for stealing technology. But according to supply chain expert Matthew Davis, there's a bigger reason.

Matthew Davis: By keeping their supply chain secret, they've created almost a brand lust.

Davis says secrecy is what's behind the magic, the showmanship and the hype of an Apple product launch.

Davis: In brand lust, the products themselves are so talked about and so publicized, it generates a lot of activity and they have these huge product announcements.

The flip side to Apple's secrecy, though, is that nobody can tell how much its suppliers are damaging the environment when they make iPhones and iPads. Nobody, that is, except Apple.

But now, there's someone else: the deputy director of the environmental protection bureau of Kunshan. That's the city that has jurisdiction over the Kaedar factory.

Earlier this month, Ding Yudong spoke to state-run television in China about the harmful chemicals emitted from that factory. So we called Ding to find out more. And that's when he told Marketplace what Apple's been keeping secret for months: the Kaedar factory is making Apple products -- and it's broken environmental law in the process.

Ding says last month, his bureau shut down 10 production lines at Kaedar's factory-lines, he said, that were spraying a chemical coating onto Apple products and products for other companies, too. He said the chemical spray was harmful to the people living nearby.

When we approached Apple, the company again refused to confirm whether the Kaedar factory makes its products.

I recently returned to Tongxin village to see if things had changed since Kaedar shut down the production lines. This time, nobody wanted to talk to me. Some people hid in their homes when they saw me.

When I ask two men about the pollution, they say, "What pollution?' There's no pollution here." Another man said he and others who spoke to journalists have been threatened -- he angrily accused me of working for Apple.

I ask one woman if she's been threatened. "I don't know," she says nervously.

But then Dong Qiaozhen invites me inside her house.

Dong Qiaozhen: Yes, we've been threatened. Village officials have warned us not to talk to reporters about the pollution.

But what about the pollution? Dong says the air is better during the day. But each night, the Kaedar factory -- the one where some of Apple's products are made -- it starts to stink up the village air, just like it did before.

Environmentalist Ma Jun says he hopes Apple will clean up its supply chain. Apple's a big brand, and Ma knows if he goes after the company, it could have a big impact on many Chinese companies that regularly pollute.

Ma: We've decided we need to put pressure through the brands to reach them.

And even though Apple's still being secretive about its Chinese suppliers, it's becoming clear to Ma that Apple's already begun to put pressure on its extensive supply chain in China.

Rob has won several awards for his reporting on China, including two national Edward R. Murrow awards and an Education Writers Association award. His work was also a finalist for the 2012 Investigative...